Contract Rigidity

Stage 3 of vendor relationship degradation, in which the vendor becomes systematically less flexible on pricing, terms and exception handling at renewal or renegotiation than they were at contract initiation.

Contract rigidity reflects the vendor’s conscious or unconscious recognition that switching costs have reached a level where the customer is unlikely to leave regardless of terms at which point the vendor optimises for margin extraction rather than relationship maintenance.

The appearance of contract rigidity is the clearest signal that a contingency vendor relationship should be developed immediately, even if the transition is not yet planned.